Financial Dollarization : The Role of Foreign-Owned Banks and Interest Rates
Why in many economies households and firms borrow and make deposits in foreign currency? Expanding on the existing literature, our framework addresses this question allowing for interest rate differentials and access to foreign funds to play a role in explaining this process of asset substitution or financial dollarization. Using a newly compiled data set on transition economies and employing a standard panel as well as a panel-VAR methodology we find that increasing access to foreign funds leads to higher credit dollarization, while it decreases deposit dollarization. Interest rate differentials matter for the dollarization of both loans and deposits.
Saved in:
Main Authors: | Basso, Henrique S., Calvo-Gonzalez, Oscar, Jurgilas, Marius |
---|---|
Format: | Journal Article biblioteca |
Language: | EN |
Published: |
2011
|
Subjects: | Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems E420, Interest Rates: Determination, Term Structure, and Effects E430, Multinational Firms, International Business F230, Banks, Other Depository Institutions, Micro Finance Institutions, Mortgages G210, |
Online Access: | http://hdl.handle.net/10986/5181 |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Similar Items
-
The Impact of Banking Sector Reform in a Transition Economy : Evidence from Kyrgyzstan
by: Brown, Martin, et al.
Published: (2009) -
Bank Ownership Type and Banking Relationships
by: Berger, Allen N., et al.
Published: (2008) -
Foreign Bank Participation and Outreach : Evidence from Mexico
by: Beck, Thorsten, et al.
Published: (2010) -
A Model of the Interactions between Banking Crises and Currency Crises
by: Bleaney, Michael, et al.
Published: (2008) -
Determinants of Deposit-Insurance Adoption and Design
by: Demirguc-Kunt, Asli, et al.
Published: (2008)